Whenever I’m out and about, it doesn’t take long before somebody comes up to me asking about the history of online or internet-operated savings accounts. And truly it is a very interesting subject with a very tragic end…

The origin of the savings account actually has its root in Chiswick, with a squirrel commune at the turn of the nineteenth century. They discovered that storing acorns for the winter saved them having to go out in the cold of that season to forage. As the commune dissolved (amid numerous intrigues and rumours of acorn-laundering), people started to study the squirrels. They soon realised, however, that acorns taste pretty rank, and so applied the principle laterally to other areas, such as money. The Savings Account was born.

Much later, the internet was conceived in the USA and again the foundation lay within the animal kingdom. Shortly before the conclusion of the Second World War, nuclear testing was undertaken in the Nevada desert in an area believed to be devoid of all life. However, a small group of spiders began to develop mutations as a result of exposure to the radiation; they became of a vast size (about the same as a Mastodon). Naturally they approached the government for work, who, at that time, were looking to develop a system whereby NATO allies could remain in contact in the event of nuclear holocaust. The spiders were asked to spin their mutated web across the world. So became the World Wide Web.

More recently, a clever bank clerk (who by no coincidence could also trace squirrel lineage in her genealogy) wondered what it would be like to merge the two concepts. The result was the most powerful financial creation of 1996: Online Savings Accounts.

Since then savings accounts operated on the internet have enjoyed considerable success. Rates tend to be a little higher to reflect the lower cost to the bank; whilst you, the customer, can manage your savings whilst wearing a squirrel costume – something that might be frowned upon if you went into a branch!

It is possible to get carried away with Online Savings Accounts though, I know I do! They have their pitfalls like anything else. But let’s be clear: many of the tips you are about to read are not confined to Online Savings Accounts. Indeed most are applicable to branch/postal/acorn shell/telephone operated savings accounts, so don’t disregard, or open an account based on the assumption that what you read applies solely to online savings.

When you go to open an account you, naturally, gravitate towards the accounts that pay the best rate. As none of us have a crystal acorn, it is important to keep an eye on the rate. A lot of these banks, building societies and squirrel co-operatives like to entice you to open an account with a high rate, only to dwindle it down to a pittance later. Luckily, you can check your current rate on the provider’s website – make sure you do this regularly to make sure you continue to get a good deal.
Unconditional Bonuses. Many of the best rates available for Online Savings Accounts will include a bonus as part of the rate. If you are attracted by the rate, make sure you check what the underlying rate (that is to say, the rate without the bonus). Keep a note of when the bonus ends (how about setting a reminder on your phone or computer) and check the account then, to see if what you are getting is still competitive.
Conditional Bonus. Some bonuses will only be paid if you don’t make, or stick within a withdrawal limit. Woe will betide you if you do withdraw some cash though – your bonus could be forfeit for a certain time, or completely!
Rate Guarantee. Sometimes a provider will offer a rate that is guaranteed to be a certain level above or below the Bank of England Base Rate. Sometimes these are for a limited period only so act essentially as a bonus as well! The practise of offering an acorn-linked guarantee is now restricted to those squirrels with accounts opened prior to 5 April 1894.
Types of account. As with other savings accounts, you can find a whole host of different types of account:
No notice accounts. These accounts (surprisingly!) do not need you to give any notice to withdraw your money from them. In contrast to a notice account you wouldn’t incur any loss of interest.
Notice accounts. These accounts tend to pay slightly higher rates than No Notice Accounts but require you to give notice to withdraw your money. You might be able to get earlier access to your cash, but this might be at the expense of losing some interest.
Monthly Income. These accounts can be no notice or notice. They are suitable if you are looking to get a regular source of income from your savings.
Bonds. These accounts can be Fixed or Variable rates. Your money is usually committed for a set term, and you will be unable to make withdrawals without penalty, if at all. This said, bonds tend to pay higher rates than other accounts due to the bigger commitment.

Establishing a savings account can be challenging for people struggling to make ends meet. However, most people have more money than they realize. Individuals who feel they cannot afford to contribute to a savings account should take time to review expenses and determine where money is spent.

Before comparing savings account providers it is important to develop a savings plan. Financial expert, Suze Orman recommends setting aside a minimum of 10-percent of income. She also suggests viewing savings contributions as a monthly bill. Saving for the future is just as important as paying monthly bills.

The easiest way to develop a savings plan is by establishing a household budget. Many people consider developing budgets an unwanted chore, but taking time to review personal finances and establish financial goals can be extremely rewarding.

In today’s economy being frugal is chic and can lead to financial freedom. The Internet provides easy access to personal finance websites which offer wealth-building strategies. Learning how to save money allows individuals the opportunity to achieve short- and long-term goals.

Once individuals determine how much money they can contribute toward savings, it is time to scout out savings account providers. Spending an hour online can help consumers obtain the best interest rate and reduce banking fees.

In order to obtain the highest return on investment, consumers should seek out savings providers that compound interest daily. According to BankRate, high yield savings accounts earn around 1.4 percent while traditional savings accounts earn.62 percent. Taking time to comparison shop can help individuals’ double earned interest.

Individuals unable to meet the recommended savings contribution of 10-percent should commit to depositing as much as possible. Most people can save at least $5 or $10 per week. Saving a little is better than not saving at all. As saved funds grow, chances are individuals will find ways to contribute additional funds. When possible, establish automatic transfers from your checking account.